Motilal Oswal top stock picks: Dalmia Bharat, SBI and which ones? See target prices
Standing at the threshold of the New Year, prominent Indian brokerage Motilal Oswal has picked a few stocks large, mid and small cap. In a report, it has outlined the target prices and business strengths of all the picks.
Kolkata: While the equity markets disappointed investors in 2025, things are supposed to look up in 2006. Several big brokerages such as Morgan Stanley have predicted that Sensex could rise significantly above 100,000, thanks to a few tailwinds such as improving corporate earnings to policy support, sound macro fundamentals to robust and continuous domestic investors and a probable conclusion of the Indo-US bilateral trade agreement and a reduction of the 50% punitive tariffs on US imports from India.
In this climate of buoyant expectations, prominent Indian brokerage Motilal Oswal has mentioned a few stock picks. These are TCS, SBI, Bharat Dalmia and Biocon. Let's have a look at the rationale offered by Motilal Oswal and the target price of the stocks.
State Bank of India
Target Price: Rs 1,100
The Indian banking sector is in a state of sound health and the big daddy of Indian banks continues to exhibit resilience, leveraging its huge customer base (more than the total population of the US and Russia) and the trust that a large section of the population reposes on this leviathan. In Q2FY26, SBI posted PAT of Rs 20,160 crore, which marked a y-o-y rise of 10%. A rising NIM and big gains from Yes Bank stake sale are the drivers of this PAT gains. The core PAT was recorded at Rs 16,700, which Motilal Oswal said was in line with expectations.
Credit growth was recorded at 13% (y-o-y). The bank authorities have forecast a loan growth of 12-14% in FY26 and NIMs more than 3%. There is a strong corporate pipeline of Rs 7 lakh crore. The brokerage expect FY27E RoA and RoE at 1.1% and 15.5%, which is a signal of resilience in core operations and rising asset quality.
Dalmia Bharat
Target Price: Rs 2,660
The company's Q2FY26 results i an indication of operational strength even as transitional headwinds define the sector, said the brokerage. On the positive side, a few important indicators such as EBITDA (or operating profit) jumped around 60% (y-o-y). Moreover, profit margins rose by more than six percentage points to 20% which have been triggered by lower variable costs. Profitability gains were helped by a low base, a conducive tax rate and high other income, observed the brokerage. Motilal Oswal also mentioned the downside -- tepid H1FY26 demand due to excessive rains and deferred purchase due to customers waiting for GST to come down. Rising petcoke prices and decline of rupee against the US Dollar could have a negative impact in the near term. The company is raising capacity at two plants.
TCS
Target Price: Rs 4,400
TCS has recently said how it is going to make a quiet transformation to serve clients in the AI-dominated age -- how it wants to be a global AI-led tech services company, adopting the AI-first operating model. It goes without saying hat if it succeeds in its mission, it will inaugurate a new dawn in the company's journey. It has projected annualised AI services revenue of $1.5 billion, which indicates 16% (q-o-q) growth. The brokerage flagged the point that the market leader status and rigorous execution of the company supports superior returns. Motilal Oswal aid they expect 4.5%/7.2% (y-o-y) growth in FY27/FY28 (in constant currency terms).
Biocon
Target Price: Rs 460
The brokerage mentioned that Biocon has consolidated its grip on Biocon Biologics which gives it full control in biologics, generics, and contract drug manufacturing and development business. It can now scale up fast by launches in insulin and expansion in generics. The acquisition of the remaining 23.3% is also in the works. That leadership changes will follow the integration of the businesses has also been indicated. Motilal Oswal has mentioned that the business outlook is encouraging in the backdrop of product launches, scale-up of generics business and growth/operating leverage in Syngene business.
Astra Microwave Products
Target Price: Rs 1,100
Astra Microwave Products is in the business of manufacturing RF and microwave systems. The brokerage flagged the fact that the company has an order book of Rs 2,200 crore order till Q2FY26. It also generated a 13% revenue CAGR in FY21–25 and its operating margins (EBITDA) has jumped to 25.6% from 12.3%. Motilal expects revenue ti grow at a CAGR of 18% between FY25 and FY28. Its margins could grow close to 26% and net profit could grow at a CAGR of 23%. It has been described as a "compelling long-term opportunity in defense electronics".
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